Fiscal 2023 revenue increased 11%
year-over-year to $59.6 million
Provides Fiscal 2024 revenue guidance of $66 -
$69 million (+10-15%) and EPS guidance of $0.66 - $0.68
Simulations Plus to host its Investor Day on
November 14, 2023
Simulations Plus, Inc. (Nasdaq: SLP), a leading provider of
modeling and simulation software and services for pharmaceutical
drug discovery and development, today reported financial results
for its fourth quarter and fiscal 2023, ended August 31, 2023.
Fourth Quarter Financial Highlights
- Total revenue increased 33% to $15.6 million
- Software revenue increased 59% to $9.3 million, representing
60% of total revenue
- Services revenue increased 8% to $6.3 million, representing 40%
of total revenue
- Gross profit increased 35% to $12.3 million; gross margin was
78%
- Adjusted EBITDA of $4.9 million, representing 31% of total
revenue
- Adjusted EPS of $0.18
- Net income of $0.5 million and diluted earnings per share (EPS)
of $0.03, compared to net income of $1.0 million and diluted EPS of
$0.05 in the fourth quarter of 2022
Full Year Financial Highlights
- Total revenue increased 11% to $59.6 million
- Software revenue increased 12% to $36.5 million, representing
61% of total revenue
- Services revenue increased 8% to $23.1 million, representing
39% of total revenue
- Gross profit increased 11% to $47.9 million; gross margin was
80%
- Adjusted EBITDA of $20.6 million, representing 35% of total
revenue
- Adjusted EPS of $0.67
- Net income of $10.0 million and diluted EPS of $0.49, compared
to net income of $12.5 million and diluted EPS of $0.60 in fiscal
2022
Management Commentary
“We delivered strong revenue and earnings results for fiscal
2023, marked by our team’s impressive execution on building strong
customer relationships,” said Shawn O’Connor, Chief Executive
Officer of Simulations Plus. “Our ability to drive growth while
navigating a challenging environment demonstrates the strength of
our customer-centric business model and the effort and dedication
of our colleagues throughout the year.”
“Fourth quarter revenue increased 33% year-over-year, driven by
strong contribution across our software segment offerings, with
notable performance by GastroPlus, and solid performance in our
services offering, especially in our quantitative systems
pharmacology (QSP) business unit, which benefitted from our
Immunetrics acquisition in the quarter. Gross margins for the
fourth quarter remained strong at 78%, reflecting a favorable mix
of higher margin software sales and our ability to pass along price
increases. We achieved our fiscal 2023 guidance for both revenue
and adjusted diluted EPS.”
“Our renewal harmonization initiative to simplify and align
contract renewals played out as expected and is essentially
complete. We achieved our goal of gaining greater visibility into
our revenues, and with contract harmonization now embedded in the
normal course of our business processes, we expect that both
Simulations Plus and our customers will see the benefits going
forward.”
“The integration of Immunetrics is going well. Immunetrics
brings its strong reputation in the immunology and oncology markets
and has a healthy pipeline, including new accounts sourced from our
Simulations Plus customer base.”
“We believe that we enter fiscal 2024 well-positioned for
continued growth. The underlying fundamentals of our market are
resilient, our pipeline is healthy, our profitability is strong,
and our balance sheet is sound. Our team remains committed to
innovative and disciplined growth that delivers long-term returns
for our shareholders.”
Fiscal 2024 Guidance
Fiscal 2024 Guidance
Annual Increase
Revenue
$66M - $69M
10 - 15%
Software mix
55 - 60%
—
Services mix
40 - 45%
—
Diluted earnings per share
$0.66 - $0.68
35 - 39%
Quarterly Dividend
The Company’s Board of Directors declared a cash dividend of
$0.06 per share of the Company’s common stock, payable on November
6, 2023, to shareholders of record as of October 30, 2023. The
declaration of any future dividends will be determined by the Board
of Directors each quarter and will depend on earnings, financial
condition, capital requirements, and other factors.
Environmental, Social, and Governance
We focus our Environmental, Social, and Governance (ESG) efforts
where we can have the most positive impact. To learn more about our
latest initiatives and priorities, please visit our ESG
website.
Webcast and Conference Call Details
Shawn O’Connor, chief executive officer, and Will Frederick,
chief financial officer, will host a conference call and webcast
today at 5 p.m. Eastern Time to discuss the details of the
Company’s performance for the quarter and certain forward-looking
information. The call may be accessed by registering here or by
calling 1-877-451-6152 or 1-201-389-0879. The webcast will be
available on our website under Conference Calls &
Presentations. A replay of the webcast will be available on the
website approximately one hour following the call.
Investor Day
Simulations Plus will host a virtual Investor Day on Tuesday,
November 14, 2023. Presentations will be made by CEO Shawn
O’Connor, CFO Will Frederick and business unit leaders. The
presentations will provide an in-depth overview of Simulations
Plus’ paths to win through stronger customer alignment, its growth
strategy, and financial outlook. Attendance is by invitation only
to institutional investors and analysts. Presentations are expected
to begin at 1:00 p.m. ET, and the event is expected to conclude at
3:00 p.m. ET. Dial-in information will be available at a later
date, and a more detailed agenda, presentations and a live webcast
will be available on the day of the event on the Simulations Plus
website at
https://www.simulations-plus.com/investorscorporate-profile/conference-calls/.
A replay and transcript of the webcast will be available shortly
after the event.
Non-GAAP Definitions
Adjusted EBITDA
Adjusted EBITDA is defined as earnings (loss) before interest,
taxes, depreciation and amortization, stock-based compensation,
(gain) loss on currency exchange, any acquisition- or
financial-transaction-related expenses, and any asset impairment
charges. Currency exchange excluded represents the exchange rate
fluctuations on the foreign currency denominated transactions. The
impact of transactions in foreign currency represents the effect of
converting revenue and expenses occurring in a currency other than
the functional currency. The Company believes that the non-GAAP
financial measures presented facilitate an understanding of
operating performance and provide a meaningful comparison of its
results between periods. The Company’s management uses non-GAAP
financial measures to, among other things, evaluate its ongoing
operations in relation to historical results, for internal planning
and forecasting purposes and in the calculation of
performance-based compensation. Adjusted EBITDA represents a
measure that we believe is customarily used by investors and
analysts to evaluate the financial performance of companies in
addition to the GAAP measures that we present. Our management also
believes that Adjusted EBITDA is useful in evaluating our core
operating results. However, Adjusted EBITDA is not a measure of
financial performance under accounting principles generally
accepted in the United States of America and should not be
considered an alternative to net income or operating income as an
indicator of our operating performance or to net cash provided by
operating activities as a measure of our liquidity. The Company’s
Adjusted EBITDA measure may not provide information that is
directly comparable to that provided by other companies in its
industry, as other companies in its industry may calculate non-GAAP
financial results differently, particularly related to
nonrecurring, unusual items.
Adjusted Diluted EPS
Adjusted diluted EPS is calculated based on net income excluding
the impact of any acquisition- or financial-transaction-related
expenses, any asset impairment charges, and tax provisions /
benefits related to the previous items. The Company excludes the
above items because they are outside of the Company’s normal
operations and/or, in certain cases, are difficult to forecast
accurately for future periods.
The Company believes that the use of non-GAAP measures helps
investors to gain a better understanding of the Company’s core
operating results and future prospects, consistent with how
management measures and forecasts the Company’s performance,
especially when comparing such results to previous periods or
forecasts.
About Simulations Plus
Serving clients worldwide for more than 25 years, Simulations
Plus is a leading provider in the biosimulation market providing
software and consulting services supporting drug discovery,
development, research, and regulatory submissions. We offer
solutions that bridge artificial intelligence (AI)/machine
learning, physiologically based pharmacokinetics, quantitative
systems pharmacology/toxicology, and population PK/PD modeling
approaches. Our technology is licensed and applied by major
pharmaceutical, biotechnology, and regulatory agencies worldwide.
For more information, visit our website at
https://www.simulations-plus.com/. Follow us on LinkedIn | Twitter
| YouTube.
Forward-Looking Statements
Except for historical information, the matters discussed in this
press release are forward-looking statements that involve risks and
uncertainties. Words like “believe,” “expect,” and “anticipate”
mean that these are our best estimates as of this writing, but
there can be no assurances that expected or anticipated results or
events will actually take place, so our actual future results could
differ significantly from those statements. Factors that could
cause or contribute to such differences include, but are not
limited to: our ability to successfully integrate the Immunetrics
business with our own, as well as expenses we may incur in
connection therewith, our ability to maintain our competitive
advantages, acceptance of new software and improved versions of our
existing software by our customers, the general economics of the
pharmaceutical industry, our ability to finance growth, our ability
to continue to attract and retain highly qualified technical staff,
market conditions, macroeconomic factors, and a sustainable market.
Further information on our risk factors is contained in our
quarterly and annual reports and filed with the U.S. Securities and
Exchange Commission.
SIMULATIONS PLUS, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME
Years ended August 31,
(in thousands, except per common share
amounts)
2023
2022
2021
Revenues
Software
$
36,517
$
32,642
$
27,670
Services
23,060
21,264
18,796
Total revenues
59,577
53,906
46,466
Cost of revenues
Software
3,627
3,060
3,235
Services
8,003
7,762
7,365
Total cost of revenues
11,630
10,822
10,600
Gross profit
47,947
43,084
35,866
Operating expenses
Research and development
4,504
3,208
4,047
Selling, general, and administrative
34,718
24,965
20,566
Total operating expenses
39,222
28,173
24,613
Income from operations
8,725
14,911
11,253
Other income (expense), net
2,970
204
(168
)
Income before income taxes
11,695
15,115
11,085
Provision for income taxes
(1,734
)
(2,632
)
(1,303
)
Net income
$
9,961
$
12,483
$
9,782
Earnings per share
Basic
$
0.50
$
0.62
$
0.49
Diluted
$
0.49
$
0.60
$
0.47
Weighted-average common shares
outstanding
Basic
20,075
20,196
20,045
Diluted
20,465
20,749
20,743
Other comprehensive income (loss), net
of tax
Foreign currency translation
adjustments
167
(265
)
(101
)
Comprehensive income
$
10,128
$
12,218
$
9,681
SIMULATIONS PLUS, INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share and per share
amounts)
August 31, 2023
August 31, 2022
ASSETS
Current assets
Cash and cash equivalents
$
57,523
$
51,567
Accounts receivable, net of allowance for
doubtful accounts of $46 and $12
10,201
13,787
Prepaid income taxes
804
1,391
Prepaid expenses and other current
assets
3,904
3,377
Short-term investments
57,940
76,668
Total current assets
130,372
146,790
Long-term assets
Capitalized computer software development
costs, net of accumulated amortization of $17,199 and $15,672
11,335
9,563
Property and equipment, net
671
632
Operating lease right-of-use assets
1,247
1,420
Intellectual property, net of accumulated
amortization of $9,301 and $7,928
8,689
9,057
Other intangible assets, net of
accumulated amortization of $2,107 and $2,662
12,825
7,560
Goodwill
19,099
12,921
Deferred tax assets
1,438
—
Other assets
425
439
Total assets
$
186,101
$
188,382
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities
Accounts payable
$
144
$
225
Accrued compensation
4,392
3,254
Accrued expenses
659
931
Contracts payable
3,250
—
Operating lease liability - current
portion
442
461
Deferred revenue
3,100
2,864
Total current liabilities
11,987
7,735
Long-term liabilities
Deferred income taxes, net
—
1,456
Operating lease liability
755
943
Contracts payable – net of current
portion
3,330
—
Total liabilities
16,072
10,134
Commitments and contingencies
—
—
Shareholders' equity
Preferred stock, $0.001 par value -
10,000,000 shares authorized; no shares issued and outstanding
$
—
$
—
Common stock, $0.001 par value and
additional paid-in capital —50,000,000 shares authorized;
19,937,961 and 20,260,070 shares issued and outstanding
144,974
138,512
Retained earnings
25,196
40,044
Accumulated other comprehensive loss
(141
)
(308
)
Total shareholders' equity
170,029
178,248
Total liabilities and shareholders'
equity
$
186,101
$
188,382
SIMULATIONS PLUS, INC.
Trended Financial
Information*
(Unaudited)
(in millions except earnings per share
amounts)
FY 2022
FY 2023
2022
2023
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
FY
FY
Revenue
Software
$
7.4
$
9.8
$
9.6
$
5.9
$
6.1
$
10.5
$
10.6
$
9.3
$
32.7
$
36.5
Services
5.0
5.0
5.3
5.8
5.9
5.3
5.6
6.3
21.2
23.1
Total
$
12.4
$
14.8
$
15.0
$
11.7
$
12.0
$
15.8
$
16.2
$
15.6
$
53.9
$
59.6
Gross
Margin
Software
90.0
%
92.0
%
92.4
%
86.1
%
85.4
%
92.0
%
91.5
%
89.4
%
90.6
%
90.1
%
Services
60.0
%
59.3
%
65.6
%
68.2
%
69.7
%
66.2
%
63.4
%
62.1
%
63.5
%
65.3
%
Total
77.8
%
80.9
%
82.9
%
77.2
%
77.7
%
83.4
%
81.8
%
78.4
%
79.9
%
80.5
%
Income from operations
$
3.8
$
5.5
$
4.9
$
0.7
$
0.9
$
4.0
$
4.1
$
(0.3
)
$
14.9
$
8.7
Operating Margin
30.6
%
37.0
%
33.1
%
5.9
%
7.3
%
25.6
%
25.2
%
-1.8
%
27.7
%
14.6
%
Net Income
$
3.0
$
4.4
$
4.1
$
1.0
$
1.2
$
4.2
$
4.0
$
0.5
$
12.5
$
10.0
Diluted Earnings Per Share
$
0.15
$
0.21
$
0.20
$
0.05
$
0.06
$
0.20
$
0.20
$
0.03
$
0.60
$
0.49
Adjusted EBITDA
$
5.3
$
7.2
$
6.5
$
2.5
$
3.0
$
6.2
$
6.5
$
4.9
$
21.5
$
20.6
Adjusted Diluted EPS
$
0.15
$
0.21
$
0.20
$
0.06
$
0.07
$
0.21
$
0.21
$
0.18
$
0.61
$
0.67
Cash Flow from Operations
$
3.6
$
2.6
$
3.8
$
7.9
$
4.7
$
5.5
$
8.5
$
3.1
$
17.9
$
21.9
Revenue Breakdown
by Region
Americas
$
8.5
$
9.7
$
11.2
$
8.4
$
8.5
$
10.6
$
10.8
$
11.0
$
37.7
$
40.8
EMEA
3.0
3.7
1.9
1.7
2.1
3.6
3.4
2.6
10.4
11.7
Asia Pacific
0.9
1.4
1.9
1.6
1.3
1.5
2.1
2.1
5.8
7.0
Total
$
12.4
$
14.8
$
15.0
$
11.7
$
12.0
$
15.8
$
16.2
$
15.6
$
53.9
$
59.6
Software
Performance Metrics
Average Revenue per Customer (in 000s)
Commercial
$
71.0
$
101.0
$
95.0
$
65.0
$
68.0
$
110.0
$
97.0
$
88.0
Services
Performance Metrics
Backlog
$
15.4
$
17.0
$
16.7
$
15.9
$
15.8
$
15.4
$
15.7
$
19.5
*Numbers may not add due to rounding
SIMULATIONS PLUS, INC.
Reconciliation of Adjusted
EBITDA to Net Income*
(Unaudited)
(in millions)
FY 2022
FY 2023
2022
2023
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
FY
FY
Net Income
$
3.0
$
4.4
$
4.1
$
1.0
$
1.2
$
4.2
$
4.0
$
0.5
$
12.5
$
10.0
Excluding:
Interest income and expense, net
(0.1
)
(0.1
)
(0.1
)
(0.4
)
(0.8
)
(1.0
)
(1.1
)
(1.3
)
(0.7
)
(4.1
)
Provision for income taxes
0.8
1.1
0.7
(0.1
)
0.4
0.9
0.9
(0.5
)
2.6
1.7
Depreciation and amortization
0.8
1.0
0.9
0.9
0.9
0.9
0.9
1.1
3.6
3.9
Stock-based compensation
0.6
0.7
0.7
0.7
0.9
1.2
1.1
1.1
2.7
4.2
(Gain) loss on currency exchange
(0.1
)
(0.1
)
0.2
0.2
—
—
0.3
0.2
0.2
0.5
Impairment of other intangibles
—
—
—
—
—
—
—
0.5
—
0.5
Change in value of contingent
consideration
0.1
0.1
—
—
—
—
—
0.7
0.3
0.7
Mergers & Acquisitions expense
—
—
—
0.3
0.3
0.1
0.4
2.5
0.3
3.3
Adjusted EBITDA
$
5.3
$
7.2
$
6.5
$
2.5
$
3.0
$
6.2
$
6.5
$
4.9
$
21.5
$
20.6
*Numbers may not add due to rounding
SIMULATIONS PLUS, INC.
Reconciliation of Adjusted
Diluted EPS to Diluted EPS*
(Unaudited)
(in millions, except Diluted EPS and
Adjusted Diluted EPS)
FY 2022
FY 2023
2022
2023
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
FY
FY
Net Income (GAAP)
$
3.0
$
4.4
$
4.1
$
1.0
$
1.2
$
4.2
$
4.0
$
0.5
$
12.5
$
10.0
Excluding:
Mergers & Acquisitions expense
—
—
—
0.3
0.3
0.1
0.4
0.9
0.3
1.7
Immunetrics transaction costs
—
—
—
—
—
—
—
2.3
—
2.3
Cognigen trade name write-off
—
—
—
—
—
—
—
0.5
—
0.5
Tax effect on above adjustments
—
—
—
(0.1
)
(0.1
)
—
(0.1
)
(0.5
)
(0.1
)
(0.7
)
Adjusted Net income (Non-GAAP)
$
3.0
$
4.4
$
4.1
$
1.2
$
1.5
$
4.2
$
4.3
$
3.7
$
12.8
$
13.8
Weighted-average common shares
outstanding:
Diluted
20.7
20.7
20.8
20.9
20.8
20.5
20.4
20.4
20.7
20.5
Diluted EPS (GAAP)
$
0.15
$
0.21
$
0.20
$
0.05
$
0.06
$
0.20
$
0.20
$
0.03
$
0.60
$
0.49
Adjusted Diluted EPS (Non-GAAP)
$
0.15
$
0.21
$
0.20
$
0.06
$
0.07
$
0.21
$
0.21
$
0.18
$
0.61
$
0.67
*Numbers may not add due to rounding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231025046790/en/
Investor Relations Contacts: Tamara Gonzalez Financial
Profiles 310-622-8234 slp@finprofiles.com
Renee Bouche Simulations Plus Investor Relations 661-723-7723
renee.bouche@simulations-plus.com
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